Bank Litigation: February 2015 Archives

Alabama Supreme Court Holds Bank of First Deposit Must Bear Liability for Under-Encoded Check

On September 30, 2014, the Alabama Supreme Court issued an important decision with wide-ranging implications for depositary institutions. In the case of Troy Bank and Trust Co. v. The Citizens Bank, 2014 WL 4851511 (Ala. 2014), the Court held that a bank that "under-encodes" a check is strictly liable for any loss caused by such an action under the Uniform Commercial Code.

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